Has Bitcoin Creator Satoshi Nakamoto Been Found?

The identity of Satoshi Nakamoto, the creator of bitcoin​ who had not been verifiably heard from since 2011, has been a hotly debated mystery since someone using the pseudonym authored a white paper describing a peer-to-peer cryptocurrency in 2008. As of Monday morning, however, the mystery may have been solved: Craig Stevenson Wright, an Australian computer scientist, has offered what he says is proof that he is Satoshi in the flesh. (See also, Risks & Rewards Of Investing In Bitcoin.)

The quest for the real Satoshi has seen many twists and turns, including an embarrassing flub by Newsweek, which incorrectly put forward a California man named Dorian Satoshi Nakamoto as bitcoin's creator in March 2014. Wright has been the subject of Satoshi-speculation in the past. In December, hackers sent documents to Wired and Gizmodo which they claimed proved the Australian was Satoshi. Hours later police raided his home in Sydney, and Wright refused to speak to the press.

On Monday, Wright published a post on his personal blog in which he claimed to offer technical proof that he is in possession of a private key used in the first bitcoin transaction, in the ninth "block." Prior to the big reveal, however, Wright met with prominent bitcoin developer Gavin Andresen and ex-director of the Bitcoin Foundation Jon Matonis, both of whom said Monday that they believe Wright's claim.

Wright also approached three news outlets, the BBC, GQ and the Economist. GQ describes the interview, which they say will be published in a forthcoming issue, as "incredibly heated," with Wright telling Senior Commissioning Editor Stuart McGurk, "Look, I'm doing this, then I'm disappearing. I'm not doing this to try and get in the media. This will never happen again. You've got this one thing. If you don't like it, fuck off." (See also, Bitcoin ETFs: How Do They Work?)

Lingering Doubts

Of the three outlets, The Economist is the most skeptical. The magazine says that Wright demonstrated in person the verification process he describes in his blog post – for both block 9 and block 1 – but notes that "such demonstrations can be stage-managed." When the magazine asked Wright to make his block 1 proof public and to provide other assurances, he refused to "keep jumping through hoops." (See also, Blockchain Definition.)

The skepticism doesn't end at The Economist. A reddit post calling Wright's proof "worthless" has received around 300 responses in four hours, many of which express the belief that Gavin Andresen's blog was hacked as part of a larger hoax perpetrated by Wright. Gregory Maxwell, another leading bitcoin developer, told the New York Times that Wright's evidence "demonstrates no connection between this person and Bitcoin's creation."

A tweet from an account calling itself the "Official Bitcoin Core Feed" says, "There is currently no publicly available proof that anyone in particular is Bitcoin's creator."

There is currently no publicly available cryptographic proof that anyone in particular is Bitcoin's creator.

Bitcoin's Civil War

The past year has been a stressful time for the community surrounding bitcoin, as a "civil war" has erupted over a technical aspect of the underlying blockchain​. One camp wants to see the individual blocks enlarged so that each can include more transaction information. They argue that bitcoin will never move beyond a tiny niche if it is only ever able to process the 7 or so transactions per second it currently manages. (Visa's network can handle 56,000 per second).

The other camp argues that small block sizes are necessary to prevent increased centralization in a project devoted to de-centralizing money. Since creating blocks, or mining, is a competitive process in which the party with the greater computing power is more likely to solve for the "hash" first and win the (currently) 25 bitcoin reward, the small-block camp argues that a size increase would favor bigger, more consolidated operations. (See also, What Is Bitcoin Mining?)

In August bitcoin developer Mike Hearn, working with Andresen, put the controversy to a vote, in essence, introducing an alternate version of bitcoin's software called XT. If 5% of 1000 consecutive blocks were mined using XT, it would begin using larger blocks, and those using the old software would either have to switch or create a "hard fork" in which the blockchain tracking bitcoin transactions splits irreparably. In that case, the longer chain would likely become "bitcoin" in the minds of most users, while the other would become a nearly-worthless "altcoin." (See also, Bitcoin Is Dead? Not a Chance.)

XT did not take, but it deepened divisions in a dispute that threatens to wipe out millions of dollars in wealth. That dispute had played out without the input of the mythical Satoshi, who had not been heard from since 2011, except in a couple of incidents which are believed to be hacks. If Wright's claims are believed, his opinion on the matter (assuming he expresses one) will be influential and controversial. It is possible that his ideal block size will have as much to do with who supports his claim than the cryptographic proofs he offers. But that's politics.

Trading Center

Partner Links

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.